Third Tech Company Challenges Chinese Military Company Designation in Federal Court

GOWIN Semiconductor Corporation, a Chinese technology startup, is challenging its designation as a "Communist Chinese military company" (CCMC) in the U.S. District Court for the District of Columbia, according to a May 21 complaint. In the complaint, GOWIN attempts to prove it is not operated by the Chinese military by showing that its governing board of directors is "comprised of nine private-sector executives, two of whom are U.S. citizens (the CEO and the President)." GOWIN goes on to argue that DOD's lack of notice to the tech startup of the designation and lack of evidence in coming to a conclusion on the label violates its due process rights. The firm also says it will suffer irreparable harm from the CCMC label, and in fact, already has. "By losing U.S. and global support as a result of the CCMC designation, GOWIN has lost and will continue to lose market share to similarly situated [semiconductor] companies, many of which are more mature and firmly established than GOWIN," the complaint said.

Claiming that the designation violates its Fifth Amendment rights of due process and was made without substantial evidence, GOWIN becomes the third company branded with the designation to challenge the label in federal court. The other two companies, Luokung Technology Corp. (see 2105070015) and Xiaomi Corporation, both received approvals for a preliminary injunction against the designation. After having its designation against Xiaomi blocked as well, the Department of Defense, the arbiter of the designation, dropped it completely (see 2105120047). GOWIN referenced both decisions in its filing.